Asian shares mixed ahead of Yellen’s testimony

DanielInman

Asian markets were mixed on Thursday, ahead of U.S. Federal Reserve Chairwoman Janet Yellen’s testimony to the Senate, while shares in Qantas Airways plunged after the airline swung into a loss.

The region lost some ground after a lackluster session in the U.S., where the S&P 500 failed to hold in record closing territory for the third straight session.

Australia’s S&P/ASX 200 lost 0.5%, after data showed that Australian firms had scaled back on investments in the fourth quarter as the resources boom that has powered the economy over the last decade slowed.

Also in Australia, Qantas Airways lost 6.7% after reporting a 235 million Australian dollar ($211 million) net loss for the six months through December, compared with a A$109 million profit in the same period last year. It also said it would cut jobs, sell airport terminal leases and defer aircraft deliveries. The airline’s weak earnings report was a black mark on the latter stages of a strong reporting season for Australia.

Reuters

A pedestrian walks past an electronic board displaying the Nikkei's movements in Tokyo.

Elsewhere in Asia, it was a mixed showing for stocks. South Korea’s Kospi fell less than 0.1%, Singapore’s Straits Times Index added 0.4%, and in Japan the Nikkei was down 0.2%, while the yen was steady in Asian trade, last at ¥102.33 to the dollar.

With few catalysts, trading activity was low, especially in Tokyo where volume hit a four-month low on Wednesday. “These conditions may persist for some time until at least Prime Minister (Shinzo) Abe puts some real concrete measures in place to flesh out his ‘Third Arrow’ proposals for structural reform,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Stocks were mixed ahead of a number of potential market-moving events. Later in the global day, Ms. Yellen will provide testimony to the Senate Banking Committee. In her Feb. 11 appearance before Congress, she said the central bank’s market-friendly, low-interest rate policies would continue. Investors will be looking to see whether the disappointing economic indicators over the last two weeks will alter her outlook.

In Asia, China will release its official factory data for February over the weekend. HSBC’s preliminary measure of factory activity hit a seven-month low last week, and investors will be looking to see whether the official numbers indicate a similar drop.

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